Some medical firms pursuing growth in India

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NEW DELHI (Dec. 10, 11:25 a.m. ET) — A number of Western companies sent representatives to the recent Medtec India trade show in New Delhi. Plastics News correspondent Satnam Singh reported these news briefs from the event.

Majority of 85 percent medical devices are imported in India

The medical plastics market in India is opening up and global players are exploring.

Many companies are looking at the India market due to its sheer size. The Indian health-care sector is recording positive trends year-on-year, but its domestic medical-device manufacturing base can not keep up with demand — therefore, the Indian medical-device industry is largely dependent on imports. Global players are studying the market potential, but few of them entered yet.

As per a study from the Indian health ministry, the global plastics market is estimated to be 386 billion pounds annually and market share of plastics in the health-care sector is merely 1 percent (4 billion pounds annually) out of which commodity plastics like PP, PVC, PE contribute 74 percent.

The Indian health-care sector is estimated at $38 billion yearly and is expected to reach $77 billion by 2013. In the next 15 years, demand is likely to grow at a compound annual growth rate of 15 percent.

The health-care industry in India accounted for 5.1 percent of the country’s gross domestic product in 2006. Expenditures on private health care surged by 227 percent to $33.6 billion in 2010. Interestingly, the share of private expenditures as a percentage of total expenditures increased to 80 percent, from 60 percent. Health-care spending could contribute 8 percent of GDP and is expected to employ 9 million people in 2012 in India.

Wisconsin's SMC expects growth in India

SMC Ltd., a Somerset, Wis.-based medical-device maker, continues to see opportunities for growth in India. The company set up a manufacturing facility there in 2011: SMC Medical Manufacturing Pvt. Ltd. in Bangalore.

“We are planning to manufacture plastic medical devices for cardiovascular, respiratory and orthopedic systems in India and we have started producing a couple of devices for cardiovascular systems in our Bangalore plant,” said B. Balakrishna Menon.

According to Balakrishna, the Indian medical-device market is largely based on imports.

“Around 85 percent of medical devices are still imported and our presence will change the dynamics, as our Bangalore plant will supply directly to OEMs,” he said.

SMC also plans to serve the U.S. and Europe from the Bangalore plant.

“Our Bangalore plant is ideally located for domestic, Asian or European design, manufacture and distribution of medical devices,” Balakrishna said. The plant’s capabilities include device and tool design, prototyping, toolmaking, component molding, subassemblies and finished devices.

Mikron focusing on emerging markets

Biel, Switzerland-based Mikron Group — with plants in Switzerland, Germany, the U.S., Singapore and China — is now shifting its focus to two emerging markets of Asia.

“Earlier, we were focusing more on the European markets, but now focus is on India and China, as both are growing markets,” said Mikron Automation regional sales manager Harald Herrmann. “Potential is there in India, but the degree of automation is low.”

“We have already sold two lines in the India market,” added Harald, who is located in Laupheim, Germany.

Germany’s FLG Automation studying Indian market

FLG Automation AG of Karben, Germany is exploring the Indian medical market for assembly lines for dialysis and filter technology.

“We have not sold any equipment to India as yet; we are studying the market,” said Thomas Simon, sales manager for medical technology.

The company is making dialyzer assembly lines at its plant in Karben. One assembly line can make 2 million to 4 million units annually. FLG also makes equipment that manufactures inhaler caps and devices.

FLG has sold a line in China and appointed Uniway Asia Ltd. of Hong Kong as its manufacturer’s representative. The line cost between $7.7 million and $10 million, he said.

Some firms say Indian market growing slowly

Some companies at Medtec said it’s too soon to act on India’s vast potential in medical devices.

Pawan Urs M. a regional sales manager for quick-disconnect maker Colder Products Co. of St. Paul, Minn., said the market there is certainly growing, but at a slow pace.

“The Indian medical-device market is growing slowly and is in a nascent stage, not comparable to China,” he said. “The high-tech medical devices are largely imported in India. We see lot of potential in this market but it still has long way to go.”

Colder Products has a plant in China and a sales office in Bangalore, India.

Joe Lui, a marketing consultant for Hong Kong-based Zeus Industrial Products Inc., agreed that it is a bit too early for some companies to establish manufacturing in India. His company, which supplies fluoropolymer medical tubing, prefers to begin through a distribution channel.

“The Indian market is growing, but we still have a very limited client base, therefore, we have a distributor in India to take care of the market,” Lui said.

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